Relevance: GS-2 : Government policies and interventions for development in various sectors and issues arising out of their design and implementation, Development processes and the development industry —the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.

Key Phrases:  Dairy Sector, SHGs, Milk Production, SHGs in Dairy Sector, DIDF, NPDD

Why in News ?

• The Govt of India is implementing National Programme for Dairy Development (NPDD) and Dairy Processing and Infrastructure Development Fund (DIDF) for Cooperatives, Milk Producer Companies (MPC), Self Help Groups SHG and Farmer Producer’s Organization (FPO).
• The SHGs are eligible to be supported irrespective of gender.
• NPDD and DIDF Schemes have been recently restructured to include SHGs.

 

Key Highlights

• As per information received from National Bank for Agriculture and Rural Development (NABARD), the Ministry of Finance, Government of India has set up a “Women Self Help Group Development Fund” to implement a ‘Scheme for promotion of Women SHGs in Left Wing Extremism Affected and Backward districts of India’ including dairy scheme.”

The Indian Dairy Landscape

About

• India has been the leading producer and consumer of dairy products worldwide since 1998 with a sustained growth in the availability of milk and milk products ,dairy being essential part of the rural economy, serving as an important source of employment and income.
• India also has the largest bovine population in the world yet the milk production per animal is significantly low vis –a –vis other major dairy producers.
• Moreover, nearly all of the dairy produce in India is consumed domestically, with the majority of it being sold as fluid milk.
• On account of this, the Indian dairy industry holds tremendous potential for value-addition and overall development.

Importance of Dairy Sector

• Secure Livelihood
  • It is a source of income to small and landless agri houses. 70 per cent of those earning their livelihood from milk are women.
  • Dairying provides a source of regular income, whereas income from agriculture is seasonal.
  • This regular source of income has a huge impact on minimizing risks to income.
• Women Empowerment
  • 69 per cent are female workers. They are dependent on the sector for their livelihood.
• Labour-Intensive Sector
  • Dairy and livestock workers account for 70 million of the farm-dependent population, which includes cultivators and agricultural laborers.
• Helping Farmers During Natural Calamities
  • Milk production increases during crop failures caused by natural disasters because farmers place a greater emphasis on animal husbandry at that time.
• Reduces Import Bill
  • Operation Flood (also called as White Revolution) converted India from a milk importer to the world’s largest producer.
• Dairy is the single largest agricultural commodity contributing 5% of the national economy.
• Feed is mostly residual from crops, whereas cow dung is important for manure.
• The milk and associated products have immensely helped India in reducing the malnutrition and undernourishment levels in the country.
• There is some indication that areas where dairy is well developed have less incidence of farmer suicide.
• About a third of rural incomes are dependent upon dairying. Livestock is a security asset to be sold in times of crisis.

Growth of Dairy Industry

• Milk Production
  • From 146.31 million tonnes in 2014-15 to 209.96 million tonnes in 2020-21, India's milk output has expanded at a compound annual growth rate of roughly 6.2 percent.
• Per Capita Availability
  • India's per capita milk availability has increased to 427 grams per day in 2020-21, up from 319 grams in 2014-15.
• The Indian dairy industry is expected to grow by 9-11% in FY22.

Challenges Faced by the Sector

• Productivity
  • Indian cattle and buffaloes have among the lowest productivity. Improving productivity of farm animals is one of the major challenges.
  • Crossbreeding of indigenous species with exotic stocks to enhance genetic potential of different species has been successful only to a limited extent.
  • The sector also witnesses adulteration practices and overuse of antibiotics to boost production.
• Need of Investment
  • There is a shortage of organized dairy farms and there is a need for a high degree of investment to take the dairy industry to global standards.
• Fragmented Supply Chain
  • The fundamental challenge in dairy is maintaining quality and quantity within a diversified supply base. Due to its perishable nature, dairy requires more complex supply chain operations and logistics to ensure freshness and safety.
• Informal Dairy Economy
  • The majority of cattle raisers are unorganised unlike sugarcane, wheat, and rice-producing farmers. This nature further inhibits the creation of political clout to advocate for their rights.
  • Only 18-20% is channelized via the organized sector.
• Price Sensitivity
  • Milk producers are highly susceptible to even minor shocks. For instance, small changes in the employment and income of consumers can leave a significant impact on milk demand.
• Lack of Budgetary Allocation
  • Despite the importance of the dairy sector in overall GDP, it receives less government budgeting than the agriculture sector.
• Impact of Emerging Market
  • The sector will also come under significant adjustment pressure to the emerging market forces.
  • Though globalization will create avenues for increased participation in international trade, stringent food safety and quality norms would be required.
• Need of Modern Technology
  • Access to markets is critical to speed up commercialization. Lack of access to markets may act as a disincentive to farmers to adopt improved technologies and quality inputs.

Government Initiatives

• National Programme for Bovine Breeding and Dairy Development (NPBBDD)
  • Launched by the union government in February 2014 after merging four erstwhile schemes viz.
    • National Project for Cattle and Buffalo Breeding (NPCBB),
    • Intensive Dairy Development Programme (IDDP),
    • Strengthening Infrastructure for Quality and Clean Milk Production (SIQ and CMP) and assistance to cooperatives.
  • Components of the scheme
    • National Programme for Bovine Breeding (NPBB)
    • National Programme for Dairy Development (NPDD) and
    • Rashtriya Gokul Mission.
• National Programme for Dairy Development (NPDD)
  • Implemented by- The Department of Animal Husbandry and Dairying
  • Aims-
    • To create and strengthen infrastructure for the production of quality milk including cold chain infrastructure linking the farmer to the consumer
    • To strengthen dairy cooperative societies/Producers Companies at the village level
    • To increase milk production by providing technical input services like cattle-feed, and mineral mixture etc.
• Dairy Processing and Infrastructure Development Fund (DIDF)
  • Implemented by- Department of Animal Husbandry, Dairying and Fisheries (DADF) .
  • Under DIDF, Government of India will provide Interest subvention upto 2.5% to NABARD from 2019-20 to 2030-31.
  • Main Objectives
    • To modernize the milk processing plants and machinery and to create additional infrastructure for processing more milk.
    • To create additional milk processing capacity for increased value addition by producing more dairy products.
• National Dairy Plan-I (NDP-I)
  • Objectives
    • Increase productivity of milch animals and thereby increase milk production to meet the rapidly growing demand for milk.
    • Provide rural milk producers with greater access to the organized milk processing sector.
• Other Govt Initiatives are
  • National Bovine Genetic Center
  • Quality Mark
  • National Kamdhenu Bredding Centres
  • E-Pashuhaat portal
  • Dairy Entrepreneurship Development Scheme (DEDS)

About Self Help Group

• Self Help Groups (SHGs) are small voluntary groups of people that come together to tackle their common challenges via self-help and collective action.
• Self Help Groups are popularly made for the purpose of doing collective economic activities and earn collective profit out of these activities with the help of Microfinance.
• SHGs are typically made up of individuals who lack access to official financial institutions.
• Villages face numerous problems related to poverty, illiteracy, lack of skills, lack of formal credit etc. These problems cannot be tackled at an individual level and need collective efforts.
• Thus SHG can become a vehicle of change for the poor and marginalized. SHG rely on the notion of “Self Help” to encourage self-employment and poverty alleviation.

Conclusion

• Government should take robust steps in order to make dairy farming more lucrative for the small and marginalized farmers.
• SHG activities positively contributed in improving members’ socio-economic conditions and working as a tool for socio-economic development through dairy farming. Steps should be initiated for strengthening the SHGs and forming Dairy SHG federation in the district to empower the members economically and socially.

Mains Question:

Q. Over the past few years, the Dairy sector has emerged as the most important sector of the rural economy in India. However, it has become one of the most vulnerable sectors of the rural economy too. Critically examine. 250 Words

Source: Invest India, Trade promotion council of India, ICAR